Crude above $55 after OPEC
By MarketWatch,
Last Update: 6/15/2005 7:21:06 AM Data provided by
LONDON (MarketWatch) -- Crude-oil futures were higher Wednesday, as an expected increase by the OPEC oil cartel of its production ceiling didn't give relief to markets.
Front-month crude was up more than 48 cents at $55.48 a barrel.
In Vienna, OPEC agreed to bring its output ceiling in line with actual production starting July 1, Libya's Oil Minister Fathi bin Shatwan said, Dow Jones Newswires said.
That equates to a 1.8% increase, or 500,000 barrels a day.
OPEC will meet again in September, Shatwan said.
The move didn't have much impact as it merely legitimizes output already hitting markets.
July-dated crude futures closed down 62 cents, or 1.1%, at $55.00 a barrel Tuesday on the New York Mercantile Exchange. The contract posted gains of almost 4% on Monday.
"Whether it was because early sellers were forced to cover short positions or OPEC promises bring into focus capacity constraints, it seems that nothing can deter buyers, as long as concerns persist about the ability of refineries to produce enough to satisfy both the current demand for diesel, and as winter approaches, heating oil," said Mike Fitzpatrick, energy analyst at Fimat, in a note to clients.
He was referring to Monday's surprising run in prices despite almost no damage from tropical storm Arlene and the increasing expectation that OPEC would raise production quotas.
The Saudi Arabian Oil Minister Ali al-Naimi said on Saturday that a lack of refinery capacity, and not a lack of crude, is driving prices higher.
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